The influence of the private sector on public universities

Developing countries around the world understand the value of private businesses and corporations and the role they play in the economy. In many cases, governments want to pass some of their duties to private organisations to provide certain services to the public and there are many reasons to justify such endeavours. In other instances, the inability of public establishments to seek solutions creates market demand for private companies to then rise up and fill the void.

Education is a sector that receives much attention from the government, private entities and the general public. A significant portion of the population relies heavily on the provision of public education because it is relatively free. The quality of education in institutions of higher learning can vary to a degree based on a number of factors, such as funding and expertise.

In Malaysia, there are 20 public universities, and more than 150 private higher learning institutions. According to the Malaysian Education Blueprint - Higher Education (2013-2015), there are more than 450,000 students in private institutions, more than 540,000 students in public universities and more than 300,000 students in other types of higher learning institutions government and non-government. These students will graduate and will seek employment. So it is important that they are well-equipped with the skills and knowledge necessary for the journey ahead.

The government of Malaysia intends to make public universities self-sustained and encourage them to look for other sources of income. This means that the government is cutting public funds and will continue to cut funds up to certain point, which was evident in this year's budget. Among the methods universities are encouraged to explore when generating their own income are donations and collaborations with the private sectors on matters concerning research and commercialisation efforts.

The advantages of corporate involvement in higher education

The motive of profit creates a wonderful feat of competition in any economy. That is one of the reasons why corporations might have much better experiences and expensive expertise. Public universities who are embarking on a journey that involves great deal of research would need these expertise which include unique research facilities, a collection of experts, a wealth of knowledge and more. Additionally, this is one of the methods that would allow operators in the private sector to give back to the people.

Looking at the construction sector for example, it is always competing for better materials, reliable methods of construction at a faster pace, cheaper and stronger equipment, expert engineers and professionals. This competition drives construction companies to build an extensive knowledge that might be closeted. If these companies are involved in the collaboration with public organisation to research the development of better materials, then there is a room to share this knowledge with researchers. The returns of such research can be translated into financial benefits for the companies involved, higher experience for the research team, better employment opportunities for graduates due to such experience, and contribution to the national economy.

Same thing can be said for companies in the oil and gas industry, computer technologies, banking and finance, medical and pharmaceutical companies, and other fields of science, technology, engineering and mathematics fields (STEM).

Private companies investment in scientific research can have a massive impact on the entire economy and every single constituent that makes it work. Additionally, benefits for universities involved in such collaborations can be global ranking, attracting more quality students to enroll, internationalisation of the institution and other benefits.

Risk of losing control

Without government regulations or with the existence of poor regulations and laws that consist of sneaky loopholes, private entities can turn into monsters that would threaten not just the economy, but the very sovereignty of the nation.

According to The Oxford Handbook of Public Policy, John D Donahue and Richard J Zeckhauser argue that the risk of private involvement in public missions can result in: 1) diluted control where the role of the government can be slowly diminished and a particular non-government organisation can assume a monopoly, 2) higher spending, price control and the risk of exploitation public funds, 3) reputational vulnerability which can be a direct result of the dilution of power, 4) diminishing capacity of public establishment to produce - thus reinforcing larger monopolies.

All of these risks can strip public trust and pave the path for a long term disability in the face of short-term profit motives.

Additionally, absolute monopolies aren't healthy for any nation, let alone higher education. Monopoly will work towards eliminating competition, which can reduce the production of expertise that drove the economy in the first place.

Commercialisation of research

When it comes to research, important distinctions must be made:

1. Fundamental research:

This type of research purely contributes to the advancement of scientific knowledge and the improvement of theoretical sciences. It may not have an immediate benefits or returns. However, it is the building blocks for much bigger research fields in the future. For instance, early research in the fundamentals of the natural world gave birth to the atomic theory, which have changed the world. Fundamental research is like a newborn baby, it may not be beneficial when it’s born, but it will be productive once it matures.

Private entities will not be interested in such research for obvious profit and risk related matters. As a result, it requires public funding to keep it afloat.

2. Applied research:

It is a direct inquiry into the practical application of scientific knowledge. The private industry is very much interested in such research because it creates the base for action research. Solutions for actual problems are born here. Whether it is a new design for a keyboard, or launching a rocket to space, this research can be highly profitable and will bring in private industries to invest in it. Private sector will need the help of universities, public or private, to conduct research, improve knowledge, produce expertise, drive the economy and maintain national integrity. Universities need private sectors as well.

Protecting the integrity of public universities

Public Higher Learning Institutions in Malaysia and elsewhere are built around knowledge and serving public interests. They are also public property. Research and knowledge products that come out of such establishments must benefit the country and the public while driving a healthy and a prosperous economy.

Therefore, clear regulations and strong laws that work for the mutual benefit of all parties are critical to the success of such ventures without abuse of power and/or private control over national resources. The following is needed:

1. Clear guidelines that highlight the involvement of private sector in public universities.
2. Private sector must be held to higher standards of ethics and operational integrity.
3. It is in the benefit of the country to keep public universities nonpartisan and uphold the liberties to serve the people’s interests,
4. Accountability is a highly needed in such circumstances